|Wednesday, January 14, 2015|
|Legislative Agenda Task Force Committee’s 2015 Draft Legislative Agenda Approved|
The 2014-2015 Legislative Agenda Task Force, chaired by Luther Moore of Belk, Inc., concluded its series of meetings on Friday, January 9th with a proposed draft legislative agenda for 2015. The meetings began at the beginning of December 2014 and gave all Charlotte Chamber members and partnership organizations the opportunity to present the legislative priorities of their organization, to be considered for inclusion in the Charlotte Chamber’s final legislative agenda. On Monday, January 12th, the Charlotte Chamber Executive Committee unanimously approved the draft legislative agenda. The agenda will be shared with members via our website and email newsletters. Additionally, the Public Policy staff and volunteers will communicate with members of the Mecklenburg Legislative Delegation and other legislators about priority issues for Charlotte Chamber members. The General Assembly convenes today to elect its leadership and will return on January 28th for the official start of the session.
The Task Force met six different times at the Belk Headquarters in southwest Charlotte, for a total of 20 presentations. The legislative priorities presented to the committee centered around five main areas: Job Creation, Taxes, Transportation, Regulatory Reform and Education. Regarding Job Creation, the Charlotte Chamber will urge lawmakers to quickly address the Job Development Investment Grant program to keep us competitive in the recruitment of new and expanding companies. We will also advocate for other tools needed for our state’s economic developers to be competitive. We will work on efforts to address the expiration of the sales tax cap on jet fuel which impacts American Airlines. Charlotte Douglas International Airport and the number of flights American Airlines brings in and out of our community are the single biggest factor in our economic development efforts.
Under the Taxes heading, we will continue our long-time advocacy to lower the corporate and personal income taxes. Additionally, we will support efforts of the legislative leadership, as they develop a NC tax code that has a positive overall impact on economic growth. NC needs a competitive tax position which provides certainty and limits tax on business to business services.
The chamber’s Transportation agenda will continue to include advocacy for the funding needed to complete major transportation projects in the Charlotte region including road projects such as the Monroe Bypass, an additional connection to Gaston County over the Catawba River, widening of I-77, as well as our regional public transportation vision. We will work with legislative leaders in support of the Strategic Transportation Investments prioritization policies as they passed last session and we will support their efforts to enhance funding from existing transportation sources to address transportation infrastructure needs.
We will continue to work with legislative leaders on Regulatory Reform issues in an effort to encourage economic growth. Those issues include, but are not limited to, a balance civil liability system including the elimination of joint and several liability and the collateral source rule, zoning regulation reforms that encourage commercial and residential development, policies that promote innovation and new opportunities in the “sharing economy” while protecting public safety, and a review of our judicial system and the funding needed for it to be effectively administered.
Our Education agenda continues to include support of Charlotte Mecklenburg Schools, Central Piedmont Community College and UNC Charlotte. We support continued reform of the teacher compensation system to ensure we remain competitive in those jobs along with continued funding of classroom growth at all levels: pre-K, K-12, community colleges and universities. We also would like to see additional flexibilities offered at our local institutions in managing budgets, employees and creating innovation for academic success. We continue to support high standards for academic achievement that aid in the development of a competitive workforce.
All chamber members are invited to participate in the process for setting the agenda and are encouraged to participate in the advocacy. Please contact a member of the Public Policy team if you are interested.
|Wednesday, September 3, 2014|
|September 3, 2014 Legislative Update|
Lawmakers Return Home for Campaigns as General Assembly Officially Adjourns
The General Assembly officially adjourned the evening of Wednesday (8/20), marking the official end of the 2014 short session. The adjournment resolution passed by the House and Senate does not establish a November special session on Medicaid reform, as was previously discussed. The extended short session, of which was first projected to end by July 4th, resulted in 572 new laws during the two-year session.
Before adjourning, several last minutes measures passed, including modifications to the Jobs Maintenance & Capital Development Fund (JMAC); a compromised coal ash cleanup agreement; and tweaks to the processes of the NC Division of Employment Security.
- JMAC Modifications
Legislators resurrected and passed a previous version of SB3, JMAC Modifications, which expands the JMAC Fund in order to finance a grant for Haywood County employer Evergreen Packaging. Evergreen Packing currently has to invest in environmental upgrades in order to stay in compliance with new federal EPA rules.
- Coal Ash Compromise
After House and Senate conference committee members of SB729, Coal Ash Management Act of 2014, announced in early August that they would not be able to come up with a compromise plan on how the state could clean up coal ash pond, most political pundits deemed the issue “dead” for 2014. However, on the final days of the legislative session a compromise was reached between the House and Senate and passed each chamber, 84-13 in the House and 38-2 in the Senate.
*See additional details below.
- NC Division of Employment Security
Lawmakers passed the last day of session SB42, Confidentiality of UC Information, which ensures that the NC Division of Employment Security will not violate federal regulations. The law prohibits Employment Security from making hearing notices of contested unemployment cases available to employment law attorneys. The U.S. Labor Department had issued an opinion finding that making the notices available would violate federal regulations regarding dissemination of confidential information, there by jeopardizing the Employment Security’s federal dollars.
House Rejects Department of Commerce Incentives Package
Before leaving, the House with a bi-partisan vote (47-54) voted down HB1224, Local Sales Tax Options/Economic Development Changes. The bill, as reported last week was a comprehensive package of economic incentives and tax changes. The proposal included the creation of the Job Catalysts Fund for the Department of Commerce, a fund that would set aside $20 million to help lure businesses to the state; it was commonly called a “closing fund.” In addition, included was the proposal to limit the local sales tax rate for counties. NC Department of Commerce Secretary Sharon Decker was a vocal proponent of the bill, arguing it was necessary to bring large projects to the state. While the measure it is technically dead until the next legislative session in January 2015, the Governor has the authority to call back the General Assembly for a “special session”. House Speaker Tillis has alluded to the possibility of the Governor calling the General Assembly back this fall for a special session on economic development measures.
Coal Ash Compromise Awaits Governor’s Approval
Per above, House and Senate leaders reached a compromise during the final hours of the legislative session on a stalled coal ash reform bill. Key provisions of the compromised package regulating coal ash ponds include:
- Coal Ash Oversight Commission: Established within the Department of Public Safety (House had originally wanted the commission with the Department of Natural and Environmental Resources). The new commission is authorized to grant three-year, instead of open-ended, extensions of the 15-year timetable for pond closures. The Senate leader will appoint three of the Coal Ash Management Commission's nine members, the House leader another three, and the governor three more, all for six-year terms.
- Rate Increases Moratorium: The moratorium on Duke Energy rate increases to pay for coal ash cleanup would expire in January 2015, vs December 2016 of which the House had advocated for.
- Coal Ash Pond Expansion: The construction or expansion of coal ash impounds is banned, effective October 1st.
- Risk Categories: DENR is instructed, by the end of 2015 to divide coal ash sites into high, intermediate, and low-risk categories. High-risk sites must be excavated and place in a lined landfill by the end of 2019 and intermediate sites by 2024. Low-risk sites can be “capped”, which is intended to keep eater from carrying the ash into water supply.
What Did the General Assembly Leave on the Table?
While the legislative “short session” was not technically short, several policy issues that were debated did not make the cut before adjournment. Those high-profile legislative issues that did not pass include:
- Medicaid Reform
After a study commission was created by the General Assembly in 2014 to create a plan for Medicaid reform, and both the House and Senate, came up with their own versions of a plan for Medicaid reform in 2014, nothing passed both chambers before adjournment. The budget included a provision stating the General Assembly’s intent to come back in November for a special session focused on the topic, however in the end the General Assembly did not pass a resolution for the special session. The issue will be carried over until the 2014 legislative session
- Teacher Assistants
Due to a mistake on the wording of language on the funding of teacher assistants in the budget, restrictions are currently in place on how school districts can fund teacher assistants. Legislators from both chambers had come up with a bill to fix the budget language, but the Senate made it conditional on the passage of HB 1224. After the House voted down HB 1224, the issue was never resolved. Governor McCrory potentially could resolve the issue with an executive order.
- Film Incentives
In the budget a $10 million film grant program was passed, that will go into effect on January 1, when the current tax credit will sunset. Much of the film industry lobbied for an extension of the current tax credit, and even with several attempts by House members to extend the credit program, it never succeeded.
- Autism Insurance Coverage
A bill to require health benefit plans to cover autism treatment did not pass the Senate after passing the House during the 2013 legislative session.
- Puppy Mills
A bill that First Lady Ann McCrory lobbied for, HB 930, Dog Breeding Standards/Law Enforcement Tools, ever passed the Senate. The bill, which would set standards for large commercial breeders in order to fight puppy mills, passed the House in 2013 on a strong bi-partisan basis, 101-14.
- Crowd Funding
An economic development measure that would have allowed companies to raise capital via crowd funding failed within the larger package of HB 1224.
|Tuesday, August 19, 2014|
|August 19, 2014 Legislative Update|
Lawmakers Wrap Up Work for Official Adjournment
Almost three weeks since the General Assembly “left” Raleigh the House and Senate continue to debate the terms of an official adjournment resolution. The Senate moved forward with its exit plan convening last Thursday, August 14. The Senate passed a bill making a budget correction that allows school districts to go through the current year without cutting teacher assistant jobs. However, the Senate made the correction contingent on the passage of HB1224, a measure that creates a new incentive fund for the Department of Commerce, along with other incentive measures and limitations for local governments to levy additional sales taxes. House Speaker Thom Tillis said he had spoken to the Senate about the incentives and budget-fix bills but was not certain what the House will do with them.
The House, before leaving for the weekend, voted to not bring up HB1224 up for a vote. Following the Senate’s passage of the budget correction for teacher assistants, the House linked a third bill (HB189) contingent on the passage of HB1224, providing certain counties the options to hold a referendum in 2016 on a .25 percent sales tax increase. The tying of a third bill to the scheme of HB1224 essentially reverses provisions that would have prevented Wake County’s option to levy a quarter-cent sales tax to raise teacher salaries. Provisions within HB1224 allows counties to exercise the quarter-cent tax option if used before the end of 2014, but Wake County has said it was too late to consider the option this year. HB189 provides another two years for counties to offer a referendum.
With the measures in limbo, the legislative session will not officially adjourn until at least Tuesday. The House was scheduled to go back into session Monday afternoon where HB1224 and HB189 are scheduled to be debated within the House Rules Committee.
Before leaving on Friday, the Senate also passed three alternative adjournment resolutions. One resolution would have the legislature end its business this year and not return until next year. The second resolution would have the legislature leave until November, when members would come back to consider a Medicaid overhaul. The third would have members leave until November 17, when they could return to consider Medicaid, bills connected to lawsuits and confirmation of special Superior Court judges, and coal ash regulations. Tillis said late last week that when House members vote to officially end the session, they will vote to adjourn until 2015, voting down a special session in November. Depending on the outcome of the adjournment resolution, the issues of Medicaid reform and coal ash may not be taken up until the new legislative session in January 2015.
Regulatory Reform Package Headed to Governor’s Desk
One item the House and Senate agreed upon last week was an updated regulatory reform package. Both the House and Senate passed SB734, Regulatory Reform Act of 2014, which contains wide-ranging provisions, primarily focused on environmental regulations. Provisions include:
- State Regulations: Bans regulators from passing any rules more stringent than federal minimum standards without the approval of state lawmakers.
- Community Colleges: Sets up training programs for beer brewing and allows community colleges to have beer at campus events.
- Isolated Wetlands: Authorizes developers to pave or build upon wetlands of up to 1 acre east of Interstate-95.
- Environmental Management Commission: Prohibits the commission from defining gravel with relation to stormwater rules.
- Venus Flytraps: Establishes the poaching of Venus flytraps a felony.
- Park Speed Limits: Allows state officials to waive the 25 mph speed limits that apply in state forests and parks for special events.
|Monday, August 11, 2014|
|August 11, 2014 Legislative Update|
General Assembly Adjournment Uncertainty…
Although lawmakers have not convened for any further business since passing the budget last week, House and Senate leaders have still not agreed upon a final adjournment resolution. The Senate version of the adjournment resolution calls for a two-day session on August 14, where they could consider any General Assembly appointments or reconsideration of any legislation the Governor vetoed. The House version of that same adjournment resolution calls for an August 14 session as well, but with a much more substantial list of matters that could be considered, including: coal ash legislation, any bills relating to environmental and natural resources laws, regulatory and administrative reforms, autism spectrum disorder insurance coverage, technical and other changes to revenue laws, or to the confidentiality of unemployment compensation information.
Until legislative leaders of both chambers come to an agreement on an adjournment resolution, including the August 14 session, both chambers will reconvene every four days for non-voting “skeleton” sessions, as required by the state constitution until they officially adjourn. The Senate has publicly said that since the budget has become law, they do not plan to reconvene again until November for the previously agreed-upon Medicaid reform session, while House leaders have publicly stated that they still plan to reconvene for the August 14 session to take up substantive measures.
Both the House and Senate versions of the adjournment resolution also called for the legislature to reconvene on Monday, November 17, 2014, to work on Medicaid reform. The Senate version also called for the coal ash legislation to be taken up again at the November 17 session, while the House version wants to get the coal ash legislation figured out during the August 14 session.
A “side effect” of the chambers not coming to an agreement on an adjournment resolution is that House and Senate members are prohibited by law from accepting any campaign contributions while they are in session. Until an adjournment resolution is agreed upon, legislators cannot accept any contributions or hold any fundraisers, which could be an issue for legislators with tough general election races coming up on November 4.
Right now there continues to be much confusion and uncertainty among when the legislature will reconvene, what kind of measures will be considered, and when they will officially sine die for the biennium.
Governor Signs Budget into Law
On Thursday (8/7) Governor McCrory signed the $21.1 billion budget, SB 744, Appropriations Act of 2014, into law. The 260-page bill includes the average seven percent raise for public school teachers and the $1,000 raise for most state employees. Governor McCrory released a statement saying that the budget “reflects a pragmatic and thoughtful approach to managing taxpayer dollars. It provides raises for our teachers, highway patrol officers, court employees and a cost of living increase for retirees and preserves Medicaid eligibility standards. This budget will continue to fuel North Carolina’s economic comeback.”
Governor’s Chief Budget Advisor Resigns
Governor McCrory’s Chief Budget Advisor, Art Pope announces his resignation last week. He took the job at the start of the Governor’s terms in 2013 with the understanding that he would serve one year, but the Governor asked him to stay for another budget cycle. McCrory credited Pope for his outsized role in the administration, describing how he offered legal guidance to his chief attorney, lobbied lawmakers and helped craft policy decisions in addition to his role guiding the state's spending.
A former community bank director and recent appointee to the N.C. Banking Commission will take over as state budget director next month. Gov. Pat McCrory announced last week that Lee Roberts will succeed Art Pope. Roberts, 45, is the former managing director of Piedmont Community Bank Holdings in Raleigh and was executive vice president and chief operating officer of VantageSouth Bancshares. Roberts also founded a real estate investment and advisory firm called Coley Capital, and has worked for Morgan Stanley & Co. and Cherokee Investment Partners and as an associate with Akin, Gump, Strauss, Hauer & Feld.
Governor Signs Wide Array of Bills into Law
Last week the Governor signed several bills into law, including the Appropriations Act of 2014. As of today, one bill remains on Governor McCrory’s desk for final approval – HB 133, Technical and Other Changes.
SB 648, NC Commerce Protection Act of 2014: Creates transparency in contracts between the NC Attorney General and private attorneys, prevents the abuse of patents, allows for shareholder assent to exclusive forum, and limits asbestos-related liabilities for certain successor corporations.
SB 853, Business Court Modernization: Modernizes the business court process by making various changes to the procedures of complex business court cases and streamlines the process of corporate reorganization utilizing holding companies.
HB 1145, Registration for Mopeds: Requires all mopeds to be registered with the NC Division of Motor Vehicles and calls for a legislative interim committee to study whether additional statutory changes are needed, including whether insurance should be required in order to drive a moped.
|Monday, August 4, 2014|
|August 4, 2014 Legislative Update|
Lawmakers Leave Raleigh With Official Adjournment Uncertainty….
The House and Senate finalized the $21 billion spending plan, which normally signals the adjournment of the General Assembly’s “short” session. But with the Senate and House offering two different versions of adjournment resolutions, it is unclear when the General Assembly will adjourn the session.
The Senate approved its adjournment resolution shortly after midnight on Thursday, July 31, after passing the budget and concurring on several measures that were being negotiated out in conference committees. On Saturday morning, August 2, the House followed, finalizing the budget but putting forward a different adjournment resolution. The major difference between the two resolutions is that the House wants to deal with the pending coal ash legislation and other unresolved bills in August while the Senate would push the issue of coal ash to after the November elections. The House also wants to return in two weeks to resolve other legislation, including economic development incentives and regulatory reform.
Until the adjournment impasse is resolved, the House and Senate will hold “skeleton sessions” with no legislation being moved until August 14 at the earliest, the 10-day timeline for the governor to veto any bills. Both the House and Senate have agreed to hold a November session after the elections to deal with Medicaid reform.
House and Senate Pass Budget, Governor to Sign
After more than a month of contentious negotiations between House and Senate leaders over the $21 billion budget for fiscal year 2014-2015, which began on July 1, a compromise was met with the House, Senate and governor. The House voted 66-44 and the Senate voted 33-10 to give final passage to the budget. The governor is expected to sign the budget into law early this week. Highlights include:
The budget will provide teachers with a 7 percent pay raise and retention of teacher assistants. The pay raises will boost starting teacher salary to $35,000 over two years and give most state employees $1,000 raises and five additional vacation days.
- UNC: Maintains funding for the University of North Carolina system. Increases the management flexibility cut by $2.4 million to $76 million. Provides $3 million for “game-changing” research.
- Master’s Degrees Program: Discontinues the program that offers supplemental pay, though those who already have a degree or who have already started coursework will continue eligibility.
- Community Colleges: Provides a $1,236 increase in salary and benefits. Increases tuition by 50 cents per credit hour to $72 for in-state and $264 for out-of-state.
- Pay Schedule: Replaces the 37-step pay schedule with a six-step system.
- K-1: Spends $42 million to guarantee funding for one teacher per 18 students in kindergarten and one teacher per 17 students in first grade.
- Department of Public Instructions: Reduces budget by 10 percent, or $5 million a year.
Reduction of $135 million. Preserves current levels of eligibility for Medicaid benefits
- DMV: Hires 14 more driver’s license examiners at the Division of Motor Vehicles offices and authorizes additional DMV funds to produce a new-format driver’s license and allows online renewal.
- Taxi Tax Refund: Repeals the refund of the state gas tax to taxi drivers, effective in July 2015.
- DOT Outsourcing: Outsources pre-construction activities.
- DOT Board: Calls for a study of privatization, sponsorships and fees.
- Lottery: Establishes a legislative oversight committee to examine lottery operations and recommended changes.
- Drones: Prohibits the use of drones until December 2015 without special permissions. Establishes regulations and penalties for drone use.
- UNC: Requires a study of various aspects of tuition fees at University of North Carolina institutions.
- Medicaid: Establishes the intent of the General Assembly to work on Medicaid reform during a special legislative session in November 2014.
- Film: Creates a $10 million grant program for film production companies within the Department of Commerce to replace the existing film tax credit in the first half of 2015.
Coal Ash Negotiations Stall and Governor Signs Executive Order
The House and Senate were unable to come to agreement on the coal ash legislation before “leaving” after they approved the budget. The major point of contention dividing the House and Senate is a provision that prioritizes which coal ash ponds are deemed low risk and subject to less stringent regulation. In addition, among the differences between the House and Senate bills are how many members the governor and the legislature would appoint to a newly created Coal Ash Management Commission.
After an earlier announcement that House and Senate conferees could not come to an agreement on SB 729, Coal Ash Management Act of 2014, that momentarily changed late Thursday night on July 31 when the Senate said that it would concur on the House’s version of the bill. When the Senate came back after midnight to complete its final vote on the budget, however, Sen. Tom Apodaca, R-Henderson, announced that the Senate was no longer in agreement. The Senate blamed the House for the failure to reach a deal, while the House blamed the Senate. Rep. Ruth Samuelson, R-Mecklenburg, told the News & Observer that it complicated the process to come to an agreement with the Senate adjourning on Friday. Apodaca sent forth an amendment to the Adjournment Resolution stating that the legislature may take up coal ash issues at its November special session.
Following the impasse with the House and Senate, the governor issued Executive Order 62, which instructs the Department of Environment and Natural Resources to conduct groundwater monitoring at all 33 coal ash ponds at 14 sites throughout the state.
Economic Development Measures Remain Influx
The House and Senate passed competing economic development bills, which remain in limbo. The bills, which have not passed both the House and Senate, include several provisions impacting the Department of Commerce. House Bill 1224, Local Sales Tax Options/Economic Development Changes has passed the Senate and includes the local sales tax provisions and tax incentives EXCEPT for film incentives and historic preservation tax credits. Senate Bill 763, Revenue Laws Technical Changes has passed the House and includes the film tax credits and historical preservation tax credits, EXCLUDING the local sales tax provisions and Department of Commerce provisions.
Highlights of those provisions in limbo include:
- Department of Commerce Job Catalyst Fund
The $20 million “closing fund” for the Department of Commerce allows up-front cash incentives to companies considering a major economic development project in North Carolina. The funds would allow companies to use the money for acquiring land, developing facilities or buying equipment. The fund is a priority for Governor Pat McCrory and his administration.
- Film Incentives
The House passed a bill that would extend the current film incentives program for a year with minor changes, but the Senate “adjourned” without considering the package. Rep. Ted David, R-New Hanover, passed the amendment through a technical corrections bill (Senate Bill 763) to extend the existing refundable film tax credit program for a year – to January 1, 2016 – while reducing the rebate available to film production companies from 25 percent of expenses to 22.5 percent. The amendment also would cap spending on the credit next year at $40 million and require the Program Evaluation Division to study the return on investment from the program. The amendment passed 77-36, after House Speaker Thom Tillis, R-Mecklenburg, put his support behind it in a rare speech on the House floor.
- Local Sales Tax Cap
A compromise was reached that caps the maximum local sales tax for counties at 2.5 percent. While the legislation would provide most counties the capability to raise sales taxes without a referendum, it would restrict the taxing ability of four of North Carolina’s urban counties: Wake, Mecklenburg, Guilford and Forsyth. Two other urban counties, Durham and Orange, already have their local sales tax set at 2.75 percent and were grandfathered in. The compromise version of the bill will now allow those four counties to raise their tax cap up to 2.75 percent, but only if voters agree to a quarter-cent increase by the end of 2014.
- Historic Preservation Tax Credit
The House voted to retain the historic property redevelopment tax credit, but the Senate did not vote before “leaving.” The program provides an income tax credit for development of historic properties and is scheduled to expire January 1, 2015. The House voted for an extension of a reduced version of the tax credit to January 1, 2020.
House and Senate Pass Tort Reform Measures
Before the House and Senate “left” Raleigh, they passed a comprehensive tort reform measure, Senate Bill 648, NC Commerce Protection Act of 2014. The bill includes the following provisions:
- Private Attorney Contracting by Attorney General
Transparency in Private Attorney Contracting (TIPAC) provides that state-awarded contingency fee contracts are open and transparent and that the state shall receive maximum practicable amount of any settlement or award.
- Patent Protection
Strengthens protections against abusive patent assertion claims.
- Asbestos-Related Liabilities
Limits the liability of companies that assumed or incurred asbestos-related successor liabilities through operation of law, including a merger or consolidation when the company incurred such liability prior to January 1, 1972.